South African Finance Minister Enoch Godongwana has stated that neither he nor President Cyril Ramaphosa intends to review how the Public Investment Corporation (PIC) invests in unlisted assets. This announcement was made during a virtual plenary session of the National Assembly, where Godongwana addressed oral questions from MPs. The PIC has faced instability at the board level, including the resignation of deputy finance minister David Masondo as PIC board chair in July.
The question was raised by EFF MP Omphile Maotwe, who inquired whether Godongwana had presented a proposal to Ramaphosa to eliminate the unlisted investment portfolio of the PIC. Godongwana clarified that he and Ramaphosa had not discussed any possibility of doing away with the unlisted portfolio of Africa's largest asset manager. He emphasized that their focus is on reforming the PIC, including its unlisted assets, to its previous form, which funded empowerment, infrastructure, and small and medium enterprises.
Godongwana expressed confidence in the newly appointed PIC board, stating that they are equal to the task. He mentioned that the PIC's unlisted portfolio represents about 5% of its total assets under management, estimated to be between R127bn and R162bn. However, this component of its investments has exposed the PIC to governance impairment and performance challenges. The minister's statement aims to reassure stakeholders about the PIC's future.
EFF MP Nthako Matiase also asked if Masondo's resignation as chair of the PIC board was related to any possible corruption or impropriety on his part. Godongwana stated that it would be premature to make such a statement, adding that Masondo had requested the president to appoint the Special Investigating Unit (SIU) to investigate certain matters before his resignation. The president has since responded to Masondo's request and appointed the SIU, with all related matters currently under investigation.
Godongwana plans to meet with the PIC leadership to discuss key strategic matters for the asset manager. He assured that he would not interfere with the SIU's investigation, allowing the unit to carry out its duties independently. This meeting is expected to address some of the challenges facing the PIC and provide clarity on its future direction.
The PIC's unlisted portfolio has been a subject of concern due to governance and performance issues. Godongwana's statement suggests that the government is committed to addressing these challenges and restoring the PIC to its previous form. The minister's assurance that there are no plans to review the unlisted portfolio may help to alleviate some of the uncertainty surrounding the PIC.
The PIC plays a critical role in South Africa's economy, and its stability is essential for the country's financial sector. Godongwana's statement aims to provide reassurance about the PIC's future and the government's commitment to its reform. The investigation by the SIU is expected to shed more light on the circumstances surrounding Masondo's resignation and any potential issues within the PIC.
Key points
- The South African government has no plans to review the Public Investment Corporation's unlisted asset portfolio.
- The PIC's unlisted portfolio represents about 5% of its total assets under management, estimated to be between R127bn and R162bn.
- An investigation by the Special Investigating Unit is underway into certain matters related to the PIC, following a request from deputy finance minister David Masondo.
